unit 1 Flashcards
what are the business objectives
profit
growth
survival
cash flow
social obj
ethical obj
what is a mission
a business’s overall purpose or main corporate aims
what do mission statements do
make all stakeholders aware of what the business does and why
tells you the purpose, value, standards and strategy of the business
what do mission statements give staff
a sense of shared purpose and encourage them to work towards common goals
cooperation of staff makes it more likely a business wil achieve its aims
business objectives
to enable them to achieve their mission
objectives turn the overall aims of a business into specific goals that must be met
what is the relationship between missions and objectives
objectives turn the overall aims of a business into specific goals that must be met
why do businesses set objectives
coordination between deparments
motivating for employees
useful in decision making
managers can compare performances with ibjectives to measure success of the business
profit objectives
businesses making a loss might aim to become profitable
established businesses might want to increase their profits
how can profit objectives be achieved
by setting functional objectives such as minimising costs or to increase sales
growth objectives
many businesses aim to grow, the larger a business grows the more able it is to use its position in the market to earn higher profits
what can growth objectives be based on
increasing revenue
market share
expansion of a business
survival objectuves
survival objectives just means objectives that enable a business to continue trading rather than running out of money
it becomes a key objective during periods of strong competition or recession
cash flow
cash flow is money that moves in and out of a business over a set period of time
why do businesses set cash flow objectives
to improve their cash flow
increasing cash flow gives company greater chance of survival
social objectives
relate to benefiting society or people in need
ethical objectives
based on moral principles about how businesses treat people and the environment
non profit organisations
charities or social enterprises, work to achieve social or ethical objectives
revenue formula
selling price per unit x quantity of units sold
revenue def
value of sales, referred to as turnover, amount of money generated by sales
fixed costs
dont change with output
examples of fixed costs
rent, business rates, basic salaries, cost of new machinery
variable costs
rise and fall as output changes
variable costs formula
total variabe costs = v.c per unit x no. of units sold
total costs
fixed costs + variable costs
